Willis Group net income Q2, $119 million

Willis Group Holdings Limited (NYSE: WSH), net income for the quarter ended June 30, 2005 was $119 million, or $0.72 per diluted share, compared with $96 million, or $0.57 per diluted share, a year ago. Results for the second quarter showed a net gain on disposal of operations of $78 million ($41 million or $0.25 per diluted share, after tax).
Total reported revenues for the quarter ended June 30, 2005 increased 3% to $549 million, from $532 million for the same period last year. The effect of foreign currency translation increased reported revenues 1% and net acquisitions added 2%.
Organic revenue growth excluding volume and profit-based contingent commissions and other market remuneration was 4% in the Q2, comprised of approximately 6% in net new business and a negative 2% impact from declining insurance premium rates and other market factors.
Reported operating margin was 37.5% for the quarter ended June 30, 2005. Excluding severance costs and net gain on disposal of operations, adjusted operating margin was 23.3% for the second quarter of 2005 compared with 28.2% for the same period last year. Approximately 3% of the decline in adjusted operating margin was due to the elimination of contingent commissions and the decline in other market remuneration; the remainder of the decline was due to net incremental hiring expenses.
Total volume and profit-based contingent commissions relating to 2004 arrangements totaled $8 million in the quarter ended June 30, 2005 (all of which derived from outside the United States) compared with $15 million a year ago. Other market remuneration declined to $5 million in the second quarter compared with $20 million for second quarter 2004. The decline in contingent commissions and other market remuneration reduced organic revenue growth by 4%.
Net income for the six months ended June 30, 2005 after net gain on disposal of operations and first quarter charges for regulatory settlements and related expenses, severance costs and other provisions was $191 million, or $1.14 per diluted share, compared to $244 million, or $1.44 per diluted share, a year ago.
Total reported revenues for the six months ended June 30, 2005 increased 2% to $1,218 million, up from $1,197 million for the corresponding period in 2004. The adjusted operating margin, excluding regulatory settlements and related expenses, severance costs and other provisions and net gain on disposal of operations, was 27.1% for the first half of 2005, compared with 32.2% for the same period last year.